Marriage, followed by house sale

[jtrevor]

This will impact tax year 2026, because of the timing of the sale, but I wanted to get a head start.

I married for the first time in November 2025, in the US.  My wife and I lived separately, in the same state, until our wedding date, meaning that we each had a primary residence as of the day before the wedding.  Neither of us have any other real property, and neither of us sold another home in the past 5 years.  We moved into my home the day of the wedding, then listed her house for sale in January 2026.  The house closing, and official sale date, will be early March 2026.

Assuming that relevant tax laws do not change between now and next year, will we be responsible for any capital gains on the sale of her home?  The gains will be under $250k, which is the maximum benefit for a single person.  My understanding of Publication 523 is that I'm entitled to no exclusion ($0), because I never lived there, but she's entitled to a $250k exclusion - which is what she would have received if she'd filed Single.  So we'll have a $250k exclusion total, covering the capital gains fully.  Is that correct?

[Opus 17 · Accepted solution]

Yes, you are correct.  Marriage imparts ownership (you are considered to also have owned the home) but marriage does not impart residency.  So she can claim an exclusion of up to $250,000.  

Then, if you sell your house (the house you owned formerly), you would also be entitled to an exclusion of $250,000.  To qualify for an exclusion of $500,000, you would have to wait until at least March 2028, because your wife can only use her exclusion once every 2 years. 

[jtrevor]

Great! Thank you.